Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Current and Deferred Components of Income Tax Expense (Benefit)

The current and deferred components of income tax expense (benefit) are as follows:


Year Ended December 31	2015			2014			2013

(In millions)

Income tax expense (benefit):
Federal:
Current	$	79		$	370		$	705
Deferred		(234	)		(23	)		(232	)
State and city:
Current		21			12			19
Deferred		5			6			1
Foreign		86			92			163

Total	$	(43	)	$	457		$	656

Components of U.S. and Foreign Income and Reconciliation between Federal Income Tax Expense at Statutory Rates and Actual Income Tax Expense

The components of U.S. and foreign income before income tax and a reconciliation between the federal income tax expense at statutory rates and the actual income tax expense is as follows:


Year Ended December 31	2015			2014			2013
(In millions)

Income before income tax:
U.S.	$	543		$	1,499		$	1,945
Foreign		(299	)		311			332
Total	$	244		$	1,810		$	2,277


Income tax expense at statutory rate	$	86		$	633		$	797
Increase (decrease) in income tax expense resulting from:
Exempt investment income		(126	)		(121	)		(99	)
Foreign related tax differential		(18	)		(48	)		(117	)
Amortization of deferred charges associated with intercompany
rig sales to other tax jurisdictions		38			44			31
Taxes related to domestic affiliate		(10	)		14			19
Partnership earnings not subject to taxes		(38	)		(39	)		(38	)
Unrecognized tax benefit (expense)		1			(42	)		66
Other (a)		24			16			(3	)
Income tax expense (benefit)	$	(43	)	$	457		$	656

(a)	Includes state and local taxes, retroactive tax law changes, adjustments to prior year estimates and other non-deductible expenses.

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits, Excluding Tax Carryforwards and Interest and Penalties

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding tax carryforwards and interest and penalties, is as follows:


Year Ended December 31	2015			2014			2013
(In millions)

Balance at January 1	$	57		$	91		$	67
Additions based on tax positions related to the current year		7			6			2
Additions for tax positions related to a prior year								31
Reductions for tax positions related to a prior year		(3	)		(35	)		(7	)
Lapse of statute of limitations		(7	)		(5	)		(2	)
Balance at December 31	$	54		$	57		$	91

Summary of Deferred Tax Assets and Liabilities

The following table summarizes deferred tax assets and liabilities:


December 31	2015			2014
(In millions)

Deferred tax assets:
Insurance reserves:
Property and casualty claim and claim adjustment expense reserves	$	178		$	265
Unearned premium reserves		230			187
Receivables		30			37
Employee benefits		419			432
Life settlement contracts		48			46
Deferred retroactive reinsurance benefit		84			61
Net operating loss carryforwards		245			321
Tax credit carryforwards		131			93
Basis differential in investment in subsidiary		19			21
Other		282			209
Total deferred tax assets		1,666			1,672
Valuation allowance		(147	)		(48	)
Net deferred tax assets		1,519			1,624

Deferred tax liabilities:
Deferred acquisition costs		(117	)		(226	)
Net unrealized gains		(166	)		(469	)
Property, plant and equipment		(998	)		(1,132	)
Basis differential in investment in subsidiary		(428	)		(472	)
Other liabilities		(173	)		(204	)
Deferred tax liabilities		(1,882	)		(2,503	)

Net deferred tax liability (a)	$	(363	)	$	(879	)

(a)	Includes $19 and $14 of deferred tax assets reflected in Other assets in the Consolidated Balance Sheets at December 31, 2015 and 2014.